Lansner: Developer scores with hotel binge

One of the fun parts of my job is watching folks who think against the grain – and then go out and profit from their contrarian bent.

So it's the day before the opening of twin hotels in Tustin, and the guy who's idea it was, Bob Olson, is tinkering with the layout of chairs in the lobby.

The scene is chaotic, as any pre-launch site is, but Olson seems unusually cool for the moment.

“We could have opened a few days ago,” the CEO of R.D. Olson Development later boasts, though the hotel staffers within earshot give a curious look at the boss.

But you have to trust Olson on hotel openings. Why? Because he's been one of the rare birds in the industry who was in construction mode well before the recent boom.

Earlier this month, R.D. Olson and its partners at Martelli Investments from Anaheim opened two Marriott-run hotels at the $60 million Tustin Pacific Center just off the 55 in Tustin – a 149-suite Residence Inn and a 145-room Fairfield Inn & Suites. The complex also includes a modest retail component to complement the lodging.

When I talked with Olson a year and a half ago, his growth vision could have been viewed as aggressively optimistic.

He's opened five hotels in Southern California and one in Hawaii in two years. That may not seem like a huge building spree, but go back three or four years, when these projects were being hatched, and any growth plan was far-out-of-the-box thinking in the tourism industry.

How so? Consider Orange County hotel openings, as an example. Those include the two new Tustin hotels and a hotel Olson opened in San Juan Capistrano last year. Only one other new hotel has opened here since 2009, by the count of Atlas Hospitality.

“People thought we were crazy,” Olson says when his company planned to build amid the Great Recession as competitors were trying to get bills paid and mortgages retooled.

Olson says it was simple logic that got him to see opportunity amid the storm: “This is America.”

He was deft enough to be a seller of two hotels five years ago as tourism crested. Yet Olson also figured that despite all the recessionary pain – a drop that was amplified in his own industry fueled by very discretionary consumer and corporate spending – nothing was going to shake the nation's overall forward progress. The biggest turnaround question to Olson was how quickly, not if, opportunity would return.

That optimism meshed with the cost of building hotels dropping – both in terms of land, materials and labor. Add recession-weary local lawmakers adopting more make-a-deal moods. Olson and his team struck.

In hindsight, with a hotel building boom now seemingly underway across the region – the Disneyland area, for example, has 14 hotels in various stages on development – Olson's bet feels so low risk today.

The hotel revival came because consumers “were tired of the recession and wanted a vacation,” Olson said. Businesses are realizing “they have to see customers,” he added. The tourism rebound in Orange County, for example, means that PKF Consulting's estimate of a key measure of local hotel industry cash flow is up 25 percent in four years.

I have an affinity for hockey, so I listened carefully as Olson explained his business logic in terms of the sport's greatest player, Wayne Gretzky. This was an athlete who dominated a game not because of his athleticism or physical build, (he was shockingly small for the sport) but because of his hockey smarts.

Why did Olson see opportunity when others saw nothing? He quoted Gretzky's wisdom on anticipation: “I skate where the puck is going to be, not where it has been.”

This look-ahead expansion by Olson started in 2011 with the opening of a 140-room Courtyard by Marriott in Oceanside. Three more lodges came online in the next year: the 130-room Residence Inn by Marriott in San Juan Capistrano, the 138-Courtyard on Maui, and the 106-room Courtyard in Goleta, near the UCSB campus.

He's not done. He's now building a 210-room hotel at the Irvine Spectrum. Total no-brainer to my eye, but Olson says the question is: How will weekend occupancy fare when business travelers are gone?

And Olson has four more Southern California hotel projects in the works: one each in the downtowns of Burbank and Pasadena, plus a hotel close to the beach in Huntington Beach. Also, final papers are being prepared to let Olson develop the old Newport Beach City Hall land into a hotel, too.

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